Two Rebels reshaping Australian defamation law: Rebel Wilson v Gossip Magazines and Trkulja v Google

Defamation nerds rejoice! the Australian appellate courts have handed down two of the biggest defamation appeal decisions in the last 10 years, within a 24 hour window.

But what do these decisions mean and how are they likely to influence defamation law in Australia? Fear not! I have read both decisions and hereby gift to you a guide on their meaning and potential repercussions.

The two decisions in question were:

• Milorad Trkulja  (aka Michael Trkulja) v Google LLC [2018] HCA 25  – handed down by the High Court of Australia on 13 June 2018; and
• Bauer Media Pty Ltd & Anor v Rebel Melanie Elizabeth Wilson (No 2)[2018] VSCA 154 – handed down by the Victorian Court of Appeal on 14 June 2018 (and swiftly condemned via Rebel Wilson’s twitter feed … available here):

Bauer Media Pty Ltd & Anor v Rebel Melanie Elizabeth Wilson (No 2)

I’ll start with the Rebel Wilson decision, simply because it seems to be creating the biggest stir, and I want to keep you interested. First off, I will say that I never thought I would read a judgment of the Victorian Court of Appeal which opines on the importance of the acapella focused, teen favourite, Pitch Perfect movie trilogy –  but, here it is!

Background

Australian actress Rebel Wilson brought a defamation proceeding against the Bauer Media group, the publisher of Women’s Day, New Weekly and Women’s Weekly, after they published a series of stories about Wilson in 2015. Wilson alleged the stories carried the defamatory imputations that she was a serial liar, who invented stories about her age, name, experiences and upbringing, to make it in Hollywood.

Bauer denied the publications were defamatory, and otherwise relied on the defences of truth, partial justification and triviality. Bauer maintained until the bitter end of the trial that Wilson had lied about her age and background, and that even if the articles were untrue,  the articles were so trivial that they could not have caused any reputational harm to the actress.

In August 2017, the proceeding was heard over approximately a month before a jury and overseen by Justice John Dixon of the Victorian Supreme Court. In Victorian defamation trials, the jury determines whether a publication had a defamatory meaning. The judge is then required to make a ruling as to what the appropriate award of damages should be for the defamatory publication.

At the conclusion of the trial, the jury verdict was that Rebel Wilson was defamed by the Bauer Media articles. Justice John Dixon then handed down a damages judgment which held that Rebel Wilson was entitled to $650,000 for compensatory damages for non-economic loss (pain and suffering) and $3,917,472 of damages for economic loss, plus interest of $182,448.61 – for a whopping total of $4,749,920.61 plus costs. This decision amounted to the biggest defamation pay out in Australian history.

Grounds of appeal

Considering the financial burden of the award, it was unsurprising that Bauer Media decided to appeal the decision. In essence, Bauer argued that the trial judge committed errors by:

1. Finding that Bauer and its counsel acted improperly, unjustifiably and without bona fides when pursuing submissions (after the evidence of Wilson) that she had lied about her age and background – maintaining their defences of justification, truth and triviality.
2. Deciding that s.35 of the Defamation Act 2005 (Vic) entitled the court to award general compensatory damages above the statutory cap, if circumstances of aggravation were found.
3. Awarding a manifestly excessive amount of $650,000 for non-economic loss, which should be set aside, and re-considered by the Court of Appeal.
4. Determining that on the balance of probabilities Wilson had lost an opportunity to earn $15 million US (reduced by 80% to $3.9M), between mid-2015 and the end of 2016, and that Bauer was the cause of the loss. Bauer also took issue with how the trial judge quantified the loss of opportunity.

What did the Victorian Court of Appeal determine?

The Victorian Court of Appeal decision is a joint decision of Tate, Beach and Ashley JJA. The decision is a hefty 250 pages, and has all the hallmarks of a decision written by Justice (David) Beach. Prior to his appointment to the Court of Appeal, Justice Beach was the judge principally responsible for the Defamation List in the Victorian Supreme Court Trial Division, so it is highly likely that he took the lead in writing this tome.

Critical to understanding the appeal decision is that Bauer Media did not appeal or challenge a range of key findings of the trial judge regarding Bauer’s poor behaviour, including that:

• Bauer published the articles in question with full knowledge that they were false;
• Bauer failed to properly investigate the defamatory allegations made by the source that required anonymity and payment;
• Bauer published the false stories in order to maximise its commercial opportunities and as part of a campaign to ‘take down’ Rebel Wilson;
• Bauer did not call evidence from any witnesses in their editorial process to explain the decision to publish;
• Bauer sent a series of insulting and harassing messages to Rebel Wilson’s family; and
• At least one of the Bauer articles was published with malicious intent.

The key lessons taken from the Court of Appeal decision are:

1. Although individuals at Bauer Media may have known that the articles about Rebel Wilson were untrue, this does not mean that their solicitors and barristers were aware of Bauer’s employees’ knowledge of falsity during the trial. Accordingly, the solicitors and counsel did not act inappropriately by maintaining Bauer’s defences of justification and truth throughout the trial. The lawyers conduct was not a further act of aggravation that should have been considered by the trial judge when assessing damages.
2. The trial judge was correct in his application of s.35 of the Defamation Act 2005 (Vic). Where there is a finding that a defendant has engaged in aggravating conduct, the court is entitled to impose an award of compensatory damages above the statutory cap ($389,500) for both general compensatory damages and aggravated damages. Meaning that the statutory cap is not the upper limit for general damages where there is aggravating behaviour. The aggravating damages do not necessarly start running or account for the amount awarded above the cap. When awarding above the cap, the court is not required to delineate in the award which part of the damages award is for general vs aggravated damages.
3. Because the Court of Appeal found that several of the judge’s findings regarding aggravating conduct of Bauer were erroneous, they undertook the exercise of re-evaluating the non-economic loss damages, which had been set at $650,000 by the trial judge. The Court of Appeal don’t reveal their precise mathematics in this evaluation, but allowed a deduction of $50,000 – awarding $600,000 to account for the issues that shouldn’t have been considered by the judge.
4. The Court of Appeal overturned the trial judge’s findings of inferences of fact concerning Wilson’s loss of opportunity of lead or co-lead movie roles in the United States. On the basis of two of Rebel Wilson’s witnesses, who were talent agents based in the US, the trial judge drew inferences of fact that:
5. • on the balance of probabilities she lost the chance to be cast in 3 lead or co-lead roles between 2015 and 2016; and
   • the Bauer articles were the cause of this lost opportunity (valued at approximately $15M US dollars).

The Court of Appeal engaged in a detailed scrutiny of the talent agents’ evidence and decided that their evidence did not satisfy the ‘balance of probabilities’ threshold (that it was more likely than not – ie. 50% or more likely). Critically, the Court of Appeal seems to have been swayed by the fact that both agents did not know of the defamatory articles at the time they were published and gave no evidence of the articles negative impact in Hollywood circles.

The Hollywood Agents’ evidence was that they did not know about the defamatory articles at the time of publication and that it was a ‘real mystery’ as to why Rebel Wilson was not receiving more movie offers, after the great success of Pitch Perfect 2.

As these two witnesses were engaging on a daily basis with producers, writers, directors and actors in Hollywood and still were not receiving feedback about a negative ‘grapevine effect’ of the press pieces, the court of Appeal was not convinced that the articles had impacted Wilson’s film opportunities in Hollywood.  In fact, the appeal court found the evidence suggested Wilson had been successful in obtaining deals with movie studios to develop projects (such as a Dirty Rotten Scoundrels reboot), during the relevant period, and this success was not taken into account by the trial judge as relevant film ‘opportunities’ obtained by Wilson.

In short, the Court of Appeal wasn’t satisfied that Wilson suffered a loss of film opportunities, and overturned the trial judge’s award of damages for economic loss ($3,917,472 , plus interest of $182,448.61). This means that Rebel Wilson’s judgment at trial for $4,749,920.61 was slashed to a total of $600,000, for non-economic loss only.

What’s next for Rebel and Women’s Day?

On 27 June 2018, the Victorian Court of Appeal handed down a further decision regarding what happens to the judgment sum and costs from the trial and appeal. The Court ordered that:

1.  Judgment Sum: Rebel Wilson must re-pay to Bauer Media the sum of $4,122,755 – being the amount of her successful trial judgment, less the overturned aspects of the Court of Appeal judgment of 14 June 2018, plus interest (calculated from October 2017).
2. Costs of the trial: Three weeks before trial, Wilson had offered to settle the proceeding, on the basis she would accept $200,000 plus costs assessed on a standard basis. At trial she achieved a far higher judgment ($4M+), and even though that judgment was largely overturned on appeal, with the total damages award being reduced to $600,000, this was still far higher than what Wilson offered shortly before trial. Accordingly, the Court of Appeal held that regardless of Rebel Wilson’s damages being slashed on appeal, she was still entitled to indemnity costs (usually amounts to 80% of actual costs spent) for the trial, due to the falsity of Bauer’s publications.
3. Costs of the appeal: Bauer applied for Wilson to pay their costs of appeal on a standard basis (usually amounts to 50-70% of actual costs incurred), as they were substantially successful on appeal. Wilson argued she should have her costs of appeal on an indemnity basis. The Court of Appeal held that Bauer was largely successful and should get its costs of appeal in relation to most issues, except for the s.35 Defamation Act issues – accordingly Rebel Wilson was required to pay 80% of Bauer’s costs on appeal, calculated on a standard basis. However,  Wilson was granted a certificate under s.4 of the Appeal Costs Act 1998 (Vic), which entitles Wilson to be substantially refunded by the Appeal Costs Board for any costs she pays to Bauer Media.

Rebel Wilson has already tweeted that she will appeal the Court of Appeal’s decision. My prediction is that the High Court of Australia will grant leave to appeal to the High Court as:

• it may want to weigh in on the Court of Appeal’s findings in regards to s.35 of the Defamation Act and the nature of statutory caps for general damages in the Uniform Defamation Legislation. The findings on the relative ease with which the statutory cap can be avoided after a finding of aggravating conduct, is likely to concern many publishers. I predict various media bodies and publishers will seek to intervene and be heard in the High Court on this finding;
• it may have some views on the approach taken by the Court of Appeal to the review and overturn of factual findings and inferences of fact drawn by the trial judge, and whether this was appropriate; and
• in light of its findings in Trkulja v Google [2018] HCA 25 (discussed further below) – it may be keen to comment further on the Victorian Court of Appeal’s approach to defamation appeals.

Watch this space, because this battle is far from over!

Trkulja v Google  [2018] HCA 25

Background

Mr Trkulja brought an appeal from the Victorian Court of Appeal, which had ordered that his defamation lawsuit against Google should be summarily dismissed on the basis that it had no real prospects of success, prior to Google even filing its defence.

By his statement of claim, Mr Trukulja had alleged that Google’s search engine and results had defamed him by:

(a) including auto complete predictive results which automatically linked his name to the words “criminal”, “Melbourne underworld” and “shooting”, ie:

(b) providing search results that appear after a search of Mr Trkulja’s name that present Mr Trkulja’s image next to various images of convicted Melbourne criminals.

It was alleged that the Google search results and auto complete function conveyed imputations that Mr Trkulja was a “hardened and serious criminal in Melbourne”; in the same league as “convicted murderers” Tony Mokbel and Mario Condello; an associate of Mokbel, Carl Williams and Benji Veniamin; and “a significant figure in the Melbourne criminal underworld…”

In December 2012, Trkulja complained to Google about the allegedly defamatory search results and requested it remove the content from their servers and computers. Ultimately, in mid January 2013, Google responded and stated that it had removed certain websites from its search results pages (without admission) and that it had blocked certain auto-complete predictions and search queries. Google refused to remove images of Mr Trkulja which appeared in response to other image searches made using the Google search engine.

The decisions below 

At first instance, McDonald J had dismissed an application by Google to summarily dismiss the claim. Google had argued that it did not publsh the images or the web matter; that the matters were not defamatory, and that Google was entitled to immunity from suit.

The issues at the heart of Google’s application were

• Should Google be granted a common law immunity as a search engine proprietor a global internet search provider?
• And, could Google be held to be an intentional participant in the communication of allegedly defematory search results?

McDonald J held that it was strongly arguable that Google could be liable, and concluded that a reasonable search engine user may interpret the search results and compiled material as meaning that Mr Trkulja was a convicted criminal.

On appeal, the Victorian Court of Appeal upheld Google’s appeal and dismissed Mr Trkulja’s claim (see Google Inc v Trkulja [2016] VSCA 333). The Court of Appeal delivered a lengthly judgment and ultimately made various findings about the nature of search engines and search engine liability at defamation law.

What has the High Court decided?

Mr Trkulja has now successfully appealed that decision to the High Court of Australia. The High Court’s decision has overturned the Court of Appeal’s dismissal of the proceeding, effectively resulting in a reinstatement of Mr Trkulja’s claim. This decision contains a stinging rebuke of how the Victorian Court of Appeal handled the summary dismissal question and the appeal more broadly.

The key messages delivered by the High Court include:

1. McDonald J’s first instance decision was correct. In determining the summary dismissal application, the Court of Appeal should only have dealt with the question of whether the defamatory material was capable of conveying, to ordinary reasonable people, any of the defamatory imputations alleged.
2. The Court of Appeal should not have considered the applicability of possible defences available to Google (such as innocent dissemination), before Google had even filed a defence or undertaken discovery.
3. The Court of Appeal should not have made mixed findings of fact and law regarding the nature of Google’s search engine and the applicable defences available to it, on the basis of interlocurtory and untested affidavit material filed by Google. The plaintiff had not been given the opportunity to test that evidence, yet it was adopted as the foundation of much of the Court of Appeal’s findings.
4. The Court of Appeal incorrectly considered the search results as a single composite publication, such that a reader was assumed to have observed the full range of search results attached the pleading and in full context of the “world wide web”. The High Court clarified that an ordinary reasonable search engine user could have a huge variable of knowledge and comprehension of the processes involved in search engines, and such a standard should only be determined after tested evidence at trial.
5. Contrary to the Court of Appeal’s ruling, Mr Trkulja was not required to identify in his claim whether Google was a primary or secondary publisher of defamatory material. If Google wanted to invoke a subordinate distribution defence, then it had do so via its defence and prove the relevant facts.
6. The Court of Appeal wrongly treated the decision of Beach J in Trkulja v Google (No 5) [2012] VSC 533 as if it was wrong, despite the fact that Google did not appeal that decision, and it was considered with implied approval in another common law jurisdiction (a Hong Kong High Court decision).
7. The decision in Google v ACCC (2013) 249 CLR 435 (a misleading or deceptive conduct case) was not binding authority that assisted the court with Google’s allegedly defamatory Trkulja search results. It was inappropriate to apply that decision to a summary dismissal application, before testing the evidence regarding the search engine processes at trial.

In short, the High Court’s decision clearly provides that any internet search provider should not be given the benefit of a summarily determined innocent disseminator defence in Australia. Until an internet search engine faces a full trial and a test of the evidence regarding its internal search engine practices at trial,  the High Court will not opine on whether search engines should be entitled to protection as innocent disseminators.

My prediction: these parties will be back before the High Court in a few years time, once the trial and subsequent appeals run their course.